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    Department of Systems Engineering and Engineering Management

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                    Department of Decisions, Operations and Technology

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Date: Friday, September 13, 2024, 4:30 pm to 5:30 pm HKT

Venue: ERB513, The Chinese University of Hong Kong

Title: Semi-Separable Mechanisms in Multi-Item Robust Screening

Speaker: Prof. Shixin Wang, Department of Decisions, Operations and

Technology at The Chinese University of Hong Kong Business School



Abstract:

It is generally challenging to characterize the optimal selling

mechanism even when the seller knows the buyer's valuation distributions

in multi-item screening. An insightful and significant result in robust

mechanism design literature is that if the seller knows only marginal

distributions of the buyer's valuation, then separable mechanisms, in

which all items are sold independently, are robustly optimal under the

maximin revenue objectives. While the separable mechanism is simple to

implement, literature also indicates that separate selling can not

guarantee any substantial fraction of the potential optimal revenue for

given distributions. To design a simple mechanism with a good

performance guarantee, we introduce a novel class of mechanisms, termed

“semi-separable mechanism". In these mechanisms, the allocation and

payment rule of each item is a function solely of the corresponding

item's valuation, which retains the separable mechanism's practical

simplicity. However, the design of the allocation and payment function

is enhanced by leveraging the joint distributional information, thereby

improving the performance guarantee against the hindsight optimal

revenue. We establish that a semi-separable mechanism achieves the

optimal performance ratio among all incentive-compatible and

individually rational mechanisms when only marginal support information

is known. This result demonstrates that the semi-separable mechanisms

ensure both the interpretation and implementation simplicity, and

performance superiority. Our framework is also applicable to scenarios

where the seller possesses information about the aggregate valuations of

product bundles within any given partition of the product set.

Furthermore, our results also provide guidelines for the multi-item

screening problem with non-standard ambiguity sets.



Biography:

Shixin Wang is an Assistant Professor in the Department of Decisions,

Operations and Technology at The Chinese University of Hong Kong (CUHK)

Business School. Before joining CUHK, she obtained her doctoral degree

in Operations Management from NYU Stern School of Business. Her research

interests lie in developing simple and robust pricing policies in

revenue management, and designing sparse and reliable networks in supply

chain and service systems.



Everyone is welcome to attend the talk!

SEEM-5201 Website: http://seminar.se.cuhk.edu.hk

Email: seem5201@se.cuhk.edu.hk